Energizing The Middle East
Dietmar Siersdorfer, Managing Director of Siemens Energy Middle East, is continuing a 170-year legacy through collaboration, understanding, and cutting-edge technology.
Where is the energy sector heading in terms of digitalization?
Digitalization is a vital tool in accelerating the decarbonization of the energy sector and we are seeing an increase in adoption of digital tools and in the ability of organizations to improve safety, productivity, and efficiency.
However, digitalization is still in its infancy, and as we move forward in the energy transition, it will play an increasingly important role. The rich data gained through digitalization will enable better interconnectivity, process automation, monitoring, and analysis, to ensure that we can provide stable, efficient, and clean energy for society.
What does it take to win megaprojects in the Middle East?
Partnership and trust are most important. We are building projects that will change the face of nations, creating pathways for economic growth, whilst decarbonizing energy systems. Working together to develop tailormade energy roadmaps for our customers is crucial. We are also building projects that will operate for decades and generations, creating training and job opportunities that benefit millions of people.
Preparation is key too, and having strong capacities and local knowledge cannot be understated. Siemens has a legacy stretching back over 170 years; our technologies are used in an estimated one-sixth of the electricity generated worldwide, and our global reach and strong local presence ensure we understand the countries in which we operate.
What steps is Siemens Energy taking to create a positive impact on the environment?
Environment, social, and governance (ESG) topics are a core part of our strategy to transform energy systems. Having a positive impact on the environment starts at home. That’s why we have set ambitious targets to switch our own power consumption to 100% green electricity by 2023 and we are aiming to make our own operations climate-neutral by 2030.
Highlighting the importance we place on ESG topics, our CEO, Christian Bruch, is also our chief sustainability officer, and our CFO, Maria Ferraro, is our chief inclusion and diversity officer.
Furthermore, we have a zeroharm policy that reaches every facet of our business, from the boardroom to the engineers on site.
What challenges do you face in the region, undertaking projects like decarbonizing a country’s energy sector?
Energy transformation requires new approaches to power system planning, and market operations, on top of stable regulation and public policy. The right policies and regulations need to be in place to facilitate the large amounts of investment required to enable large-scale decarbonization. This will also facilitate the partnerships needed to develop the innovative projects that will accelerate the energy transition. This is why we are collaborating with organizations such as the International Renewable Energy Agency (IRENA), to facilitate a free exchange of ideas, experience, and best practice, across countries and industries.
How has your project in Egypt impacted lives?
Our involvement in Egypt has helped reshape the national economy, enabling better access to energy for industrial, economic, and societal growth, whilst setting the stage for the country to expand into renewable energy. Through our majority stake in Siemens Gamesa Renewable Energy, we are developing large-scale wind projects, supporting Egypt’s ambitious renewable targets.
With the addition of three highly efficient gas power plants, Egypt’s total generation capacity increased by almost 45%, with huge savings in terms of emissions and natural gas costs. Additionally, Siemens Energy jointly developed facilities to provide better access to education, health, and employment.
Siemens Energy works with various partners world-wide. What is the key to a successful partnership?
We believe that partnership is vital. In the energy transition, no one company, or country can be successful alone. It’s primarily about trust, creating value, and the ability to execute. We need to be able to work closely together in the same direction, understand our partners’ requirements, and leverage each other’s strengths. Trust is built on delivering outstanding solutions that meet or exceed the customer’s requirements and create lasting, local value.
Over your 34 years at Siemens Energy, are there any projects that stand out?
Some of my personal highlights have been the Egypt megaproject, our Siemens Energy Damam Hub (SEDH) in Saudi Arabia, and our green hydrogen project in Dubai.
But it is not just about the large projects, it’s about the partnerships we have formed and the innovations we have made that are contributing to saving our planet. In this regard, our partnership with Masdar Clean Energy and the development of our green hydrogen demonstrator, which will produce synthetic aviation fuel, stands out. This is a game-changing innovation made possible by strong collaboration.
What milestones have influenced your life and leadership style?
I think one of the key lessons I’ve learned through my career is the importance of being bold. Taking every risk is definitely not advisable, so the trick is to find the right balance.
The loss of friends has definitely taught me to value my relationships more greatly, and to communicate more openly. It is very important to stay close to people and customers. Losing touch dramatically increases the risk of failure, especially for projects.
The Covid pandemic has taught all of us a great deal. But one key lesson for me has been how quickly we can adapt, particularly in adopting digitalization.
“We are building projects that will change the face of nations, creating pathways for economic growth, whilst decarbonizing energy systems.”
A crucial part of a company’s digital transformation includes cybersecurity, with 43% of Middle East CEOs planning to increase investment in cybersecurity and data privacy by 10% or more over the next three years, well ahead of the global average of 31%, according to PwC.
Mergers and acquisitions
Mergers and acquisitions will hold a more important role in business leaders’ strategies in the coming years, as companies worldwide mull restructuring and repairing efforts. According to PwC, around 41% of Middle East CEOs hope to form a new strategic alliance or joint venture in the next 12 months. And 30% of Middle East family businesses surveyed by PwC are also pursuing strategic acquisitions and mergers.
In an effort to create stronger entities in Saudi Arabia’s banking sector, Samba Financial Group merged with the National
Commercial Bank to create the Saudi National Bank, which had $239 billion in assets as of December 2020. Saudi Aramco acquired a 70% stake in SABIC for $69.1 billion in June 2020, as the company sought to build its presence in the downstream and chemicals segments.
There have also been consolidation efforts within the public sector, as governments seek to increase efficiency. For example, ASYAD consolidated three of Oman’s ports and free zones among other assets to maximize the financial returns and economic impact of government logistics investments. And ADNOC listed its distribution arm and raised funds through divestment in stakes of other assets like pipelines.
Diversification
As countries in the region faced the dual shock of the pandemic and an oil price crash, diversification has been a key priority for Middle East economies and companies alike. Entering a new market is one of several key methods to diversification, with 35% of Middle East CEOs telling PwC they are planning to enter a new market in the next year, more than any other region in the survey. Also, 58% of Middle East family businesses plan to expand into new markets in the next two years.
Entering a new market is no easy task, but many big corporations and small companies have been successful. Egypt, which was one of the few countries to grow in 2020 and the only one in the Middle
Mergers and acquisitions will hold a more important role in business leaders’ strategies in the coming years, as companies worldwide mull restructuring and repairing efforts.